In
1995, someone sold a broken laser pen for $14 on a site called AuctionWeb. This
was the rather inauspicious start for online shopping, an activity that now
generates a colossal $2.3tn (?1.75tn) in global sales.

But
these days, shoppers want to pay in any number of ways and this can cause
headaches for retailers wanting to expand abroad; so what should they do?

Nigel
Whiteoak is the co-founder of LoveCrafts, a virtual hub for knitting and
crochet enthusiasts to share their creations and buy supplies.

Having
a website rather than a bricks-and-mortar shop meant the team could sell their
wares to the world. But taking payments for these international sales wasn't
proving straightforward.

"One
of the biggest realisations we had when looking to expand was that credit card
penetration is generally much lower in most markets outside the UK and
US," he explains.

"In
Germany, open invoices are very common where you process the payment using a
third party, deliver the goods directly to the customer, and then they pay that
third party once we have delivered their crafts.

"Whereas
in Brazil and Turkey they tend to use local credit cards and pay in
instalments."

These
regional quirks were difficult to cater for.

But
then he came across a Dutch payment company, Adyen, whose payment processing
platform harnesses machine learning to customise the payment method depending
on which country the buyer is in.

Adyen's
clients include heavyweights such as Netflix, Uber and Spotify, so Mr Whiteoak
was surprised to find out how affordable its service was, with a minimum
monthly invoice of $100 (?75) and transparent per-transaction processing and
commission charges.

"Before
we started selling outside of the UK we had a turnover of around ?6.5m,"
he says. "Last year we posted 10.9 million, and with the bulk of our sales
coming from overseas, this growth is directly linked to our ability to offer
local payment methods."

Sales
have grown 125% over the last three years, he says, proving that knitting and
crochet is big business.

Image
caption

LoveCrafts
has found that people in different countries like to pay in different ways

Payment
difficulties contribute to about 15% of online shoppers abandoning their
virtual shopping baskets before completing the purchase, research suggests.
That and difficult-to-navigate, fiddly websites.

Research
from Barclaycard finds that while customers demand faster, more innovative and
mobile-friendly ways to pay, the reality is one of declined cards, verification
delays and annoying hidden transaction fees.

"Remove
the need for consumers to set up an account first," advises Greg Liset,
Barclaycard's head of small business, "and partner with suppliers that
have reliable payment systems that work first time.

"Also,
with online cross-border sales expected to soar over the next few years, being
able to offer multiple currencies is essential."

Research
from 2Checkout finds that in the US, Visa, MasterCard, PayPal and American
Express still dominate the payments landscape.

But in
other countries different favourite payment methods have emerged. For example,
in China Alipay now accounts for 54% of online sales. In the Netherlands the
iDEAL payment system is used for 44% of sales. In Japan, JCB and Konbini are
popular.

Image
caption

Shoppers
in different countries have their own favourite ways of paying

But in
India many shoppers still prefer paying in cash. So Indian start-up BookMyTrain
is aiming to simplify the online purchase of rail tickets by offering a
cash-on-delivery payment option with its app, as many people in India don't
have payment cards.

It is
also using chatbots to take customers through the booking process one step at a
time.

Simon
Johnson, general manager at software provider Freshworks, the firm providing
the chatbots for BookMyTrain, says: "Most customers today use messaging
apps such as WhatsApp or Facebook Messenger because they like how you can keep
a conversation going with whatever device they are using.

"You
don't have to be a massive company to personalise the experience more
effectively and [smaller] retailers need to have that personal touch to compete
with big e-commerce players."